EURUSD
- Consolidation Around 1.0850: EUR/USD is maintaining a range around 1.0850 in the European morning on Tuesday, reflecting a stable trading pattern.
- Support from Subdued US Dollar: The pair is finding support from a generally subdued US Dollar, contributing to its current stability.
- Hawkish Comments from ECB President Lagarde: ECB President Lagarde's hawkish comments are playing a role in supporting the Euro. Board member Yannis Stournaras emphasizes the importance of maintaining prudent monetary policy, citing substantial progress in inflation.
- Lagarde's Remarks on Disinflationary Trend: President Lagarde, in her recent statement, expressed the anticipation of an ongoing disinflationary trend, emphasizing the need for assurance in guiding toward the 2% inflation target sustainably.
- Diminishing Expectations for May Rate Cut: Expectations for an interest rate cut in May are decreasing. The CME Group's FedWatch Tool indicates approximately a 17% probability of a rate reduction in May, with the likelihood rising to nearly 54% for June.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD's consolidation around 1.0850 is supported by a subdued US Dollar and reinforced by the hawkish stance from ECB President Lagarde and Board member Stournaras. Lagarde's emphasis on the disinflationary trend and diminishing expectations for a May rate cut contribute to the current market sentiment. Investors are closely monitoring central bank communications for further guidance.
GBPUSD
- Range Trade Below 1.2700: GBP/USD is maintaining a range trade below 1.2700 early on Tuesday, indicating a steady but cautious market mood.
- Softer US Dollar Impact: The pair is influenced by a softer US Dollar, contributing to the ongoing dynamics of the bull-bear tug-of-war.
- Fed's Dovish Outlook: The FOMC minutes revealed a more dovish outlook from the Federal Reserve, as they reaffirmed a data-driven approach. This dovish stance is weighing on the US Dollar.
- BoE Governor Bailey's Testimony: Testifying before the UK Treasury committee, Bank of England (BoE) Governor Andrew Bailey hinted at a possible delay in rate cuts. He emphasized the shift from determining how tight policy needs to be to how long the current stance should be maintained for sustained inflation.
- Market Expectations for Rate Cuts: The markets have priced in four rate cuts by the end of the year, reacting to the BoE's decision to maintain the interest rate unchanged at 5.25% earlier this month.
| SMA (20) | Slightly Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD's range trade below 1.2700 is influenced by a softer US Dollar following the Fed's dovish outlook. BoE Governor Bailey's testimony has contributed to market speculation about potential rate cut delays, leading to a lift in the Pound Sterling. The market is attentive to central bank signals for further guidance.
GOLD
- Attempted Run Toward Two-Week Highs: Gold price is making another attempt to reach the two-week highs of $2,041, driven by the sustained downbeat tone of the US Dollar.
- Fed's Hawkish Outlook: The Federal Reserve's (Fed) hawkish stance on higher-for-longer interest rates is potentially limiting significant upward movements in the non-yielding gold price.
- FOMC Meeting Minutes: The FOMC meeting minutes released last week indicated that policymakers are not in a hurry to cut interest rates, providing context for gold market sentiment.
- Fed's Patience Emphasized: Kansas City Fed President Jeffrey Schmid emphasized the need for patience, suggesting the US central bank should wait for convincing evidence of winning the fight against inflation.
- Awaiting US PCE Price Index: Traders are likely holding back from aggressive directional bets, waiting for cues from the release of the US Personal Consumption Expenditures (PCE) Price Index on Thursday, which could provide insights into the potential timing of Fed rate cuts.
Closing statement: Gold's attempt to reach recent highs is influenced by the continued weakness in the US Dollar. However, the Fed's hawkish outlook and emphasis on patience from officials like President Jeffrey Schmid suggest a cautious approach. Traders are eyeing the US PCE Price Index for further clarity on the Fed's stance.
CRUDE OIL
- Geopolitical Tensions Support Prices: Crude oil prices are finding support from ongoing geopolitical tensions in the Red Sea region, particularly the targeting of civilian shipping vessels by Iran-led Houthis, raising concerns about potential disruptions to supply lines between Europe and Asia.
- Fed's Stance on Interest Rates: Kansas City Federal Reserve Bank President Jeffrey Schmid, in a significant policy address, echoed the sentiment of many central banking counterparts, emphasizing a cautious approach and not rushing to reduce interest rates.
- Resumption of Operations in Libya: The Wafa oil field in western Libya, producing 40,000 to 45,000 barrels per day (bpd), has resumed operations after a temporary shutdown on Sunday, potentially impacting global oil supply dynamics.
- Refinery Restoration in March: Refiners are anticipated to begin restoring production in March following the completion of planned plant overhauls at U.S. refineries. U.S. refinery utilization has been at 80.6% of national capacity for the past two weeks, as reported by the U.S. Energy Information Administration.
- Oil Prices Range Amidst Various Factors: Oil prices have been trading between $70 and $90 a barrel since November. Factors such as rising U.S. supply, concerns over weak Chinese demand, and OPEC+ supply cuts are influencing the market, despite ongoing conflicts in Ukraine and Gaza.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: Crude oil prices are influenced by a delicate balance of geopolitical tensions, the cautious stance of central banks, and the dynamic interplay of supply and demand factors. The range-bound trading since November reflects the market's attempt to navigate these complex dynamics.
DAX
- Market Caution Amidst Economic Indicators: Absence of German or Eurozone economic indicators initially led to a lack of clear market direction. However, investor caution prevailed later in the session, with a focus on the upcoming euro area and US inflation numbers for the week.
- Expected Increase in German Consumer Confidence: Consumer confidence in Germany is anticipated to increase in March, reaching a level of negative 29, as per a joint report by the market research institute GfK and the Nuremberg Institute for Market Decisions (NIM), providing insights into the sentiment of the German market.
- ECB Commentary Influence: Beyond economic indicators, the commentary from the European Central Bank (ECB) remains a critical factor. ECB Executive Board member Frank Elderson is scheduled to speak, and his remarks could impact investor sentiment and decision-making.
- Corporate Earnings Calendar Impact: Corporate earnings continue to be a significant factor, with Puma among the notable names releasing earnings. This puts the spotlight on the performance of major companies like Adidas, influencing investor perceptions of the overall market.
- Upcoming US Economic Data: As the session progresses, investor attention is directed toward US consumer confidence and core durable goods orders, emphasizing the interconnectedness of global markets and the influence of US economic indicators on DAX performance.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The DAX faces a landscape influenced by economic indicators, consumer sentiment, central bank commentary, corporate earnings, and global economic trends. Investor caution prevails, awaiting key data points and speeches to navigate the market's next moves.